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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (34236)	3/25/2009 10:56:57 AM
From: Peter Dierks	Respond to of 71588

LaHood Pitches Mexico Truck Plan to Skeptical Lawmakers MARCH 25, 2009 By CHRISTOPHER CONKEY WASHINGTON -- Transportation Secretary Ray LaHood met with lawmakers to hammer out a new program to let Mexican truckers cross the border, but it was unclear whether two leading Democratic opponents would lend their support. Spokesmen for Rep. James Oberstar (D., Minn.) and Sen. Byron Dorgan (D., N.D.) declined to comment on Tuesday. The two lawmakers are expected to play a main role in determining whether Congress approves a program to give Mexican trucks broad access to U.S. roads. They have consistently opposed such efforts in the past, citing safety concerns. Mr. LaHood spent much of Tuesday on Capitol Hill, where he met with lawmakers in an effort to reach agreement on a program ahead of President Barack Obama's trip to Mexico next month to meet with President Felipe Calderon. Secretary of State Hillary Clinton will visit Mexico Wednesday. "My goal is to build a program that will satisfy the safety concerns expressed by Congress," Mr. LaHood said Tuesday. Asked whether Congress was likely to approve any program crafted by Mr. LaHood, one senior Senate Democratic aide said: "I don't see it happening. It poses a threat to American jobs and security." A recent spending bill signed by Mr. Obama included language inserted by Mr. Dorgan to shut down a pilot program that allowed some Mexican truckers to operate beyond a 25-mile commercial zone inside the border. Mexico responded last week by slapping tariffs on products valued at $2.4 billion. The trade dispute has become an early test for the administration, which faces pressure from many Democratic lawmakers and unions to keep Mexican trucks off U.S. roads, but has come under criticism from business groups and trading partners for adopting what they view as protectionist measures. In recent days, a wide range of industry groups has urged the White House to craft a new Mexican-truckers program with the aim of persuading Mexico to lift the tariffs. "During these tough economic times, the American consumer can hardly afford additional costs from a retaliation effort on behalf of Mexico," said Mary Sophos, senior vice president at the Grocery Manufacturers Association, a trade group. In a statement Tuesday, James Hoffa, president of the Teamsters union, said concerns about Mexican trucks "include, but are not limited to, incomplete and inaccurate records on Mexican driver violations, an absence of any hours-of-service enforcement, and a lack of proper collection and custody procedures for drug and alcohol testing." Until it was shut down this month, a pilot program launched in 2007 allowed approved Mexican carriers to travel beyond the commercial border zone. Independent reviews of the program reported no major safety concerns over Mexican truckers in the program, but they also concluded that the pilot project was too small to draw any definitive conclusions. Mexico is among the U.S.'s top export markets. U.S. companies sold $9.8 billion of goods to Mexico in January. The tariffs Mexico imposed last week range from 10% to 45% of a product's value. Mexican officials have signaled a willingness to rescind the tariffs if a new plan emerges. Write to Christopher Conkey at christopher.conkey@wsj.com online.wsj.com

To: Peter Dierks who wrote (34236)	3/30/2009 4:27:54 PM
From: Peter Dierks	Read Replies (1) \| Respond to of 71588

Mexico's Dinosaurs Exploit the Crisis A cautionary tale for those who see an opportunity to take over key elements of the economy. By MARY ANASTASIA O'GRADY MARCH 30, 2009 So top bankers smoked a peace pipe with President Barack Obama on Friday and agreed, however vaguely, to go along with his bailout plan. It is unlikely the powwow ended banker-baiting in Washington. AP Manlio Fabio Beltrones, leader of the PRI in the Mexican Senate. Why? Because our political leaders see the public's angst as an opening for a government takeover of key elements of the economy, finance in particular. In this way, they are not unlike Latin America's 20th century populists who railed against economic liberty, recklessly grew the state's power, and left a trail of want and misery in their wake. Modern day Mexico is a cautionary tale. There the Institutional Revolutionary Party (PRI) ruled a corporatist state for 70 years and finally got voted out in 2000. Now, the old guard of the party is trying to launch a comeback. While most Mexicans see the economic contraction as a crisis, PRI "dinosaurs" (not unlike White House Chief of Staff Rahm Emanuel) view it as an opportunity. It offers them a chance to regain power and again practice the potent politics of economic nationalism. A made-to-order issue has presented itself with the U.S. government's new 36% ownership of Citigroup. Since Citi owns Mexico's Banamex, the U.S. is now part owner of the second-largest Mexican bank. Mexico's banking law forbids this: "Foreign entities that exercise governmental functions may not, in any manner, invest in or participate in the capital stock in commercial banks." Mary O'Grady discusses the consequences of Mexico's opportunism during the current crisis. (March 30) President Felipe Calderón's government has taken the position that, rather than being an intended purchaser of Banamex, the U.S. is an accidental owner as a result of a rescue. Such "exceptional" circumstances have to be expected if Mexico's banking system is to be open to international investors. The forced unloading of Banamex at a fire-sale price would be the same as announcing to the world that the country's banking system is no longer open to non-Mexicans. This would reduce competition, consumer choice and needed foreign investment. To keep governments out of the banks in the long run but also keep the banking system attractive to foreign investment, the ministry of finance (Hacienda) has proposed a change in the law that would give governments three years to divest stock acquired in a rescue. After three years the holding company (in this case Citi) would have to publicly offer at least 25% of the Mexican bank (Banamex) on the Mexican bolsa. At the end of six years, if the U.S. were still a Citigroup owner, the number would move to more than 50%. A good solution to an unforeseen problem? Not if you agree with the PRI that Mexico was a better place when it was closed to foreign competition. Writing in Mexico's El Universal under the headline "Hacienda: Flunked in Law and Nationalism" on March 23, diehard priístas Jesús Silva Herzog (secretary of Hacienda 1982-1986) and Francisco Suárez Dávila (a former undersecretary of Hacienda) tore into the government's proposal. Congress, they wrote, must defend the banking law and promote "the Mexicanization and sale of Banamex." The champion of this idea in Congress is the leader of the PRI in the Senate, Manlio Fabio Beltrones, who also has grand presidential ambitions. His strategy, which is as old as the PRI itself, is to play on public fears about the U.S. as a powerful northern neighbor that threatens Mexican sovereignty. With the 1848 Treaty of Guadalupe Hidalgo still fresh in the national psyche, atavistic politicians like Mr. Beltrones seem to think they can generate a popular backlash against the U.S. Doing it just months before midterm elections doesn't hurt either. Or so the PRI may think. But this is a dangerous game given the economic importance of the bilateral relationship. What is more, there are suspicions that the party's motivations may go well beyond love of the flag. The Mexican press has been speculating that there are domestic interests, close to the PRI, who might like to buy Banamex in a close-out sale. If that's what's going on, it won't be kept a secret. The revelation will inflict great harm on Mexico's investment profile. The PRI may feel it has some support from Mexico's Central Bank Gov. Guillermo Ortiz, who has worried aloud about foreign-owned banks restricting credit to Mexicans. But Mexican business columnist Enrique Quintana, writing in the daily Reforma, reported last week that in January, except for Spanish-owned Santander, foreign-owned banks did not cut credit. Instead, Banamex and Bancomer (also Spanish-owned) had increased credit while a number of domestically owned banks cut back. Perhaps Mr. Ortiz would make better use of his bully pulpit by advocating policies that would attract capital to Mexico, not frighten it away. Surely kicking out foreigners during a crisis has a feel-good component to it, just as piling on bankers in Washington does. But in today's global economy, the cost of such behavior goes straight to the bottom line. Let's hope the PRI figures that out before it does real damage to Mexico. Write to O'Grady@wsj.com online.wsj.com